Case Study Description of Strategies for Financial Institutions
This is a Darden case study.This note explains how a financial institution should develop its corporate strategy and the factors it should take into account in developing that strategy.
Authors :: J. Harvie Wilkinson, Jed W. Beckstead, Charles O. Meiburg, Richard D. Crawford
Swot Analysis of "Strategies for Financial Institutions" written by J. Harvie Wilkinson, Jed W. Beckstead, Charles O. Meiburg, Richard D. Crawford includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Study.this Institution facing as an external strategic factors. Some of the topics covered in Strategies for Financial Institutions case study are - Strategic Management Strategies, Financial management and Strategy & Execution.
Some of the macro environment factors that can be used to understand the Strategies for Financial Institutions casestudy better are - – increasing commodity prices, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, there is increasing trade war between United States & China, technology disruption,
digital marketing is dominated by two big players Facebook and Google, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of Strategies for Financial Institutions
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Strategies for Financial Institutions case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Study.this Institution, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Study.this Institution operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Strategies for Financial Institutions can be done for the following purposes –
1. Strategic planning using facts provided in Strategies for Financial Institutions case study
2. Improving business portfolio management of Study.this Institution
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Study.this Institution
Strengths Strategies for Financial Institutions | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Study.this Institution in Strategies for Financial Institutions Harvard Business Review case study are -
Learning organization
- Study.this Institution is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Study.this Institution is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Strategies for Financial Institutions Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Low bargaining power of suppliers
– Suppliers of Study.this Institution in the sector have low bargaining power. Strategies for Financial Institutions has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Study.this Institution to manage not only supply disruptions but also source products at highly competitive prices.
Ability to lead change in Strategy & Execution field
– Study.this Institution is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Study.this Institution in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Sustainable margins compare to other players in Strategy & Execution industry
– Strategies for Financial Institutions firm has clearly differentiated products in the market place. This has enabled Study.this Institution to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Study.this Institution to invest into research and development (R&D) and innovation.
Effective Research and Development (R&D)
– Study.this Institution has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Strategies for Financial Institutions - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Study.this Institution has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Study.this Institution has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Diverse revenue streams
– Study.this Institution is present in almost all the verticals within the industry. This has provided firm in Strategies for Financial Institutions case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Study.this Institution
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Study.this Institution does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Analytics focus
– Study.this Institution is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by J. Harvie Wilkinson, Jed W. Beckstead, Charles O. Meiburg, Richard D. Crawford can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Study.this Institution has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Strategies for Financial Institutions Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Ability to recruit top talent
– Study.this Institution is one of the leading recruiters in the industry. Managers in the Strategies for Financial Institutions are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Strong track record of project management
– Study.this Institution is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses Strategies for Financial Institutions | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Strategies for Financial Institutions are -
Aligning sales with marketing
– It come across in the case study Strategies for Financial Institutions that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Strategies for Financial Institutions can leverage the sales team experience to cultivate customer relationships as Study.this Institution is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Study.this Institution is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Study.this Institution needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Study.this Institution to focus more on services rather than just following the product oriented approach.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Strategies for Financial Institutions, is just above the industry average. Study.this Institution needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
High operating costs
– Compare to the competitors, firm in the HBR case study Strategies for Financial Institutions has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Study.this Institution 's lucrative customers.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Strategies for Financial Institutions, in the dynamic environment Study.this Institution has struggled to respond to the nimble upstart competition. Study.this Institution has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Strategies for Financial Institutions HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Study.this Institution has relatively successful track record of launching new products.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Study.this Institution is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Strategies for Financial Institutions can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Products dominated business model
– Even though Study.this Institution has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Strategies for Financial Institutions should strive to include more intangible value offerings along with its core products and services.
Slow to strategic competitive environment developments
– As Strategies for Financial Institutions HBR case study mentions - Study.this Institution takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Strategies for Financial Institutions, it seems that the employees of Study.this Institution don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Interest costs
– Compare to the competition, Study.this Institution has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Opportunities Strategies for Financial Institutions | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Strategies for Financial Institutions are -
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Study.this Institution to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Study.this Institution to hire the very best people irrespective of their geographical location.
Using analytics as competitive advantage
– Study.this Institution has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Strategies for Financial Institutions - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Study.this Institution to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Study.this Institution can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Study.this Institution can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Low interest rates
– Even though inflation is raising its head in most developed economies, Study.this Institution can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Strategy & Execution industry, but it has also influenced the consumer preferences. Study.this Institution can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Study.this Institution can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Strategies for Financial Institutions, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Learning at scale
– Online learning technologies has now opened space for Study.this Institution to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Study.this Institution to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Developing new processes and practices
– Study.this Institution can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Building a culture of innovation
– managers at Study.this Institution can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Study.this Institution can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Buying journey improvements
– Study.this Institution can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Strategies for Financial Institutions suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Study.this Institution can use these opportunities to build new business models that can help the communities that Study.this Institution operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Threats Strategies for Financial Institutions External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Strategies for Financial Institutions are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Study.this Institution with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Study.this Institution business can come under increasing regulations regarding data privacy, data security, etc.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Study.this Institution can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Strategies for Financial Institutions .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Study.this Institution needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Consumer confidence and its impact on Study.this Institution demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Study.this Institution will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Technology acceleration in Forth Industrial Revolution
– Study.this Institution has witnessed rapid integration of technology during Covid-19 in the Strategy & Execution industry. As one of the leading players in the industry, Study.this Institution needs to keep up with the evolution of technology in the Strategy & Execution sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Study.this Institution needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Study.this Institution in the Strategy & Execution sector and impact the bottomline of the organization.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Study.this Institution.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Environmental challenges
– Study.this Institution needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Study.this Institution can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Shortening product life cycle
– it is one of the major threat that Study.this Institution is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Weighted SWOT Analysis of Strategies for Financial Institutions Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Strategies for Financial Institutions needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Strategies for Financial Institutions is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Strategies for Financial Institutions is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Strategies for Financial Institutions is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Study.this Institution needs to make to build a sustainable competitive advantage.
